KUALA LUMPUR: Recent advances in digital banking in Malaysia, which saw five consortia obtain digital banking licenses, are expected to attract more foreign investors to the country.
Usman Akhtar, partner and head of Bain & Company’s Private Equity practice in Southeast Asia, said digital banking is poised to attract investors, similar to other global markets.
“Digital banking has attracted investor interest in many markets, and we can assure you there is no shortage of investors enthusiastic about digital financial services.
“Digital banking would be an investment theme going forward, and we need to keep an eye on it,” he said during a question-and-answer session at a press conference on the Bain and Company Southeast Asia Private Equity Report 2022 today.
Over the years, the internet and technology sectors have accounted for the lion’s share of deal volume and value across the entire Asia-Pacific PE landscape.
In Southeast Asia, the digital economy continues to grow as technology-driven investment remains dominant in Indonesia (60% of the number of deals) and leads growth in Singapore (50% of the number of deals) and in Vietnam (55%). hundred of the number of transactions).
Other sectors such as healthcare and financial services are starting to take a noticeable share as investment targets, accounting for 18% and 9.0% of the number of transactions respectively.
Commenting on the trend of private equity in Malaysia, Senior Advisor to Bain’s Global Private Equity business, Suvir Varma, said that unlike Singapore, Vietnam and Indonesia, private equity activities in Malaysia are less active, although they continue to attract foreign investment.
“We continue to see occasional deals in the consumer products space, precision engineering logistics and e-commerce facilitated logistics hub, but investors are seeing more attractive growth-oriented investment opportunities on other Southeast Asian markets,” he added.
According to Bain & Company’s 2022 Annual Southeast Asia Private Equity Report released today, the value of Southeast Asian private equity investment deals was $25 billion. Americans in 2021 against a five-year average, with Singapore increasing by 108%, followed by Indonesia. (up 310%), Vietnam (up 91%), while Malaysia (down 7.0%).
In terms of overall performance, the Southeast Asian private equity market experienced one of the most impressive turnarounds in its history, with deal value reaching a record high of $25 billion, more than doubling 2020 figures.
The previous year had seen a significant slowdown, with the market registering the largest decline of any Asia-Pacific market due to travel restrictions hampering deal-making and due diligence processes, but the gradual opening up of countries in the second half of 2021 helped drive a rebound in deal value.
Akhtar said Southeast Asia as a region rebounded strongly from the COVID-19-hit year 2020, with the level of activity in 2021 showing that investors were eager to make up for lost time.
Asia-Pacific now accounts for more than a quarter of the global equity market and in 2021, increased investor confidence in Southeast Asia has led to the strongest deal volume growth of any country in the APAC and was only behind Japan in deal value growth.